For months, former eBay chief executive Meg Whitman was the story of California politics -- using tens of millions of dollars in personal campaign contributions to build a wide lead over state Insurance Commissioner Steve Poizner in the Republican primary for governor and emerging as a front-runner in a general-election matchup against state Attorney General Jerry Brown (D).

Of late, Whitman is the story for a different reason. She has watched her support rapidly erode and is now in a real race against Poizner in advance of the June 8 primary.

In a memo distributed to reporters last week, Poizner pollster Neil Newhouse released data that put Whitman ahead of Poizner by 38 percent to 28 percent, a far cry from the edge of 59 percent to 11 percent she held done in February. (The Fix is aware of at least two other private polls that show the race that close or closer.)

"Meg Whitman has been steadily losing voters and doing so at an accelerated rate as GOP voters increasingly begin to focus on this race," Newhouse wrote.

The Whitman forces acknowledge slippage but insist all is well. "What we've seen is [Poizner's] money spent in trying to drive Meg's negatives has had a leveling effect on the race," said Whitman consultant Rob Stutzman.

What gives? How can a candidate who has already lent her campaign $59 million and hired the best consulting team money can buy find herself in a dogfight with three weeks to go?

In conversations with close observers of California politics, a few reasons for Whitman's struggles stand out.

First, the state has a history of wariness toward free-spending business people running for office. From Michael Huffington to Al Checchi to Steve Westly, candidates whose money stands at the center of their campaigns have been rejected. (Poizner is something of a flawed messenger on this issue, having already donated $19 million of his own money to his bid.)

Second, Whitman has allowed herself to be defined as the insider in a year when being the outsider represents the political high ground. With former governor Pete Wilson serving as her campaign chairman and endorsements from national political figures such as Sen. John McCain of Arizona and former Massachusetts governor Mitt Romney, Whitman has turned into the de facto incumbent. Poizner has sought to drive that point home to voters with an ad in which Whitman morphs into Gov. Arnold Schwarzenegger (R) -- a decidedly unpopular figure among Republican voters.

Third, Whitman's adversarial relationship with the press -- she has had several high-profile run-ins with the media in the state, and her campaign has been accused by Poizner of hiding her from reporters -- has contributed to a sense of entitlement and aloofness that voters find unattractive.

While there is little debate in California Republican circles that Whitman has lost considerable altitude in the primary, there is far less certainty about where the race is headed.

Whitman strategists insist that she remains the favorite and that, while she has lost some vote share, Poizner hasn't gained any significant amount. They add that Whitman is the only candidate in the race with a proven record on fiscal issues -- a contrast they hope to exploit in the final days of the contest. "We're confident because at the end of the day, Meg is the only fiscal conservative in the race and voters will choose her for that reason," said Whitman spokeswoman Sarah Pompeii.

But with Whitman's momentum slowed considerably, the California Democratic Party has joined the fray -- launching an ad that takes her to task for serving on the board of Goldman Sachs. "While Washington cracks down on Wall Street and Goldman Sachs, Meg Whitman is silent," says the ad's narrator. "Is it because she was on the board of Goldman Sachs and made millions from insider stock deals?" (The Whitman campaign cites the ad as evidence that Democrats don't believe they can beat her in a general election.)

Poizner, too, is hammering Whitman on her ties to Goldman, with an ad that uses images of circling vultures to castigate the former eBay executive for profits she made from home foreclosures. "Meg Whitman: bad judgment, wrong values," concludes the ad's narrator.

Regardless of who emerges as the Republican nominee in California next month, the race is yet another example of the tremendous volatility in the political markets these days. Voters are unhappy and they are looking for someone -- anyone -- who understands their frustrations.